Real Estate Info

My husband and I will probably be selling our house in the next year or so. I believe the use of a Realtor is prudent, but know from past experience that nothing that they do is worth 7% of the price of my home. Is there a way to find a realtor that is willing to negotiate a set fee, and not a percentage of the price of the home?

Mostly because of the internet, a lot of things are changing, and Realtors are more willing to list properties for less than in the past, especially in a hot or steady market (for more details on listing commissions, click here).

Here is the thing you need to keep in mind when negotiating agent compensation - there are normally two Realtors involved in each sale. The listing agent and the selling agent. The listing agent puts the sign in your yard and enters the property in the MLS. Sometimes extensive marketing is required and sometimes not. It depends largely on the market. Then there is all the follow-up work once the home actually sells (for more on the duties of a listing agent, click here).

However, the selling agent (buyer's agent) looks at homes in the MLS (Multiple Listing System) and decides which properties to show their clients. If the commission offered to the selling side is lower than customary, they might not show the property. Therefore, you will get fewer potential buyers previewing your house.

So think of compensation separately. Determine what you should pay your listing agent based on the amount of work you think they will do on your behalf, then determine what you think a selling agent should earn in order to make sure your property is shown.

If the seller has a Realtor & I do not, can I save the buy side commission?

The commission is paid by the seller, not by the buyer, and the commission amount is set up in the listing contract. However, you can attempt to negotiate a lower price and ask the agent to reduce their commission since they will be (in effect) representing both sides of the transaction. The agent will be a "dual agent" or a "seller's agent," representing either the seller or both of you together.

Expect resistance toward a commission reduction because, whether you realize it or not, the listing agent will end up doing many things that your own agent would be doing on your behalf. In a situation where the listing agent would contact your agent for whatever reason, there is no one to contact - they have to do it themselves. So the listing agent is doing the job that your agent would normally have done.

Therefore, you may be able to get a Realtor to reduce their commission somewhat, but not by the entire amount that a selling agent would have earned.

I listed my house with an agent with the understanding that if one of two friends buy my property, she would be compensated at 3% commission. One of my friends has made an offer. When my agent sent me the estimated pay out from the transaction, she put in her commission as 6%. Her explanation is that the original deal was only good until she listed the house in MLS. Is this ethical? Or legal?

Sounds like...well, it doesn't sound ethical, does it? Since agents generally list a property in the MLS immediately, it doesn't sound like a genuine explanation. You should have made sure the listing contract contained this stipulation, but that is looking backward. One explanation is that she found it difficult to tell her manager of her agreement with you, and now that she is stuck, doesn't know how to fix it.

I would call the Realtor's manager and start out very nicely and tactfully about your verbal agreement with the agent, and how that seems to have become "confused." Normally, the desire to build good will in the community will convince the manager to acquiesce and adjust the commission appropriately.